Corporate Child Care in Australia

Corporate Child Care in
Is it in the Public Interest?
Jennifer Sumsion
Charles Sturt University, Australia
In Australia, corporate child care
= ABC Learning
ABC Learning owns / operates 1,158 child
centres (21% of total 5,372 centres; 29% of
3,886 for profit centres)
The next largest provider (not for profit
provider) operates 145 centres
The only other remaining corporate provider
operates 44 centres
(Citigroup, 2007)
ABC Learning Centres Limited
Annual Report 2006
ABC Learning’s global
UK: 48 of 15,605 centres (0.3%)
USA: 1,150 of 120,000 centres across 39 States
(1.1%) (includes franchises in Hong Kong,
Indonesia, Philippines as part of Learning Care
NZ: 77 of 1,700 centres (4.5%)
China: subsidiary (123 Global Holding) and
joint ventures planned for 2008
(Citigroup May 07, June 07 )
ABC Learning’s plans for UK
• Owns / operates 48 Busy Bees centres
• Soon to acquire 88 Leapfrog Nurseries (in total,
0.8% of all centres)
• Anticipated total of 250-300 centres (1.9%)
• “…happy to sort of take it slow” (Eddy Groves, CEO)
(ABC Notes Prospectus, 2007; Inside Business, 2007)
Number of ABC Learning centres
ABC Learning’s net profit A$m
'07E '08E
A corporate success story…(?)
Investment analysts increasingly refer to:
high risk
poor visibility (i.e. transparency)
aggressive expansion
‘mature’ Australian market
low occupancy rates in USA
vulnerable to ‘brand damage’ / (reputational risk)
share price underperformance
(Citigroup, June 07)
But is it in the public interest?
• What “is good for the community as a community”
(Stone, 2002, p.21)
• Where “governments and economic and social
institutions exist to serve people, rather than the
(Davies, 2004, p. 305)
• A social contract between business and the general
community articulating reciprocal obligations
(Davies, 2004)
Public interest: A contentious
What is in the public interest changes as circumstances
change and as values and perceptions of the society
(Davies, 2004)
“It is not in the public interest if the activities of a
corporation take unfair advantage of public goods,
distort functioning of markets, externalize costs,
produce ‘bads’ (undesired or harmful goods), acquire
excessive (or any?) power over people, or otherwise
erode the health of society and the natural
(Davies, 2004 p. 178)
What crucial questions need to be
Is maximising returns to shareholders
inconsistent with providing high quality ECEC?
Is providing high quality ECEC sufficient?
What, exactly, do we perceive to be under
threat? What evidence do we have of that threat?
Are we losing sight of the bigger picture by
focusing so much attention on just one of many
potential threats (corporatisation) to quality?
What are the costs of corporate success?
Crucial questions …
• Does ABC Learning’s size / profitability bring
undue influence to conversations with government
and to its membership of policy communities?
(Ball, 2007)
• What are its “flows of influence”?
(Ball, 2007, p. 129)
• How does ABC Learning manage reputational
risk, given that its reputation is a crucially
important resource?
How to scaffold a critical analysis in
the absence of empirical data?
• litmus tests
e.g., ‘Would we be concerned if this was happening in
the non-profit sector’?
• Cribb & Ball’s (2005) ethical audit framework
focusing on goals, obligations and dispositions (see
Sumsion, 2006)
• Opportunity costs i.e., the costs involved in choosing
a particular direction or course of action over another
(broad ranging impact / cost - benefit analyses)
Public interest as a possible scaffold?
What might a social contract between business
and the general community articulating reciprocal
obligations involve? (Davies, 2004)
trust (that motives go beyond self interest)
recognition (that obligations go beyond profit
civic engagement - contribution to strengthening
social and democratic fabric
conducive / contribution to economic growth /
economic stability
Reciprocal obligations / relations
What is the nature of relations between corporation,
public and the state and how are they changing?
Childcare Corporation
(children, families, communities)
Public perceptions of ABC Learning
(a tentative, partial analysis)
Dimension of
public interest
Sources of empirical evidence
investment analysts; researchers
ECEC community; parents (Harris,
2007); researchers
recognition of its
ABC employees (Rush, 2006; Rush &
Downie, 2006); researchers (Purcal &
Fisher, 2004); social commentators
civic engagement
economic growth
/ stability
Investment analysts; researchers
(Brennan, 2007)
Purcal & Fisher (2004)
• analysed ‘interim approvals’ in NSW
(ie exemption from employing a university qualified EC
teacher despite the centre being licensed for more than 29
• for-profit services had 79.4 % of interim approvals
despite comprising only 52.3 % of all centres
requiring an EC teacher
• one unidentified provider had 31 interim approvals
(17.6 % of all approvals) for its 65 services
requiring an EC teacher, even though it operated
only 4 % of all centres requiring teachers.
Rush (2006) N= 578
229 respondents from 81 community-based centres
77 respondents from 30 ABC Learning centres
Enough time to develop
individual relationships with chn
Staff ratios never drop below
legal minimum
Good variety of equipment
Nutritious food for chn
Enough food for chn
Rush (2006)
less commonly reported findings
“If you have or had your own
children aged under two, would
you be happy to enrol them at the
centre where you work or one
with comparable quality of
No (because
of quality
(because of
Rush & Downie (2006)
• 20-30 min telephone interviews [N=20] with
subsection of 77 ABC Learning employees who
responded to survey
• explored survey questions / responses in more
depth [arguably loaded questions]
• data indicated wide range of views; concerns
seemed little different from concerns generally
reported in literature about working conditions in
long day care (except for a culture of secrecy –
referred to by 25% of participants)
Harris (2007)
• Interviewed 20 women in Townsville (North
Queensland) whose children attended long day
care centres (14 x community-based, 2 x
independent for profit, 5 x corporate)
• 9 participants indicated centre met their ‘quality
(6 x community, 2 x independent, 1 x corporate)
• 4 participants indicated centre did not meet their
quality vision at all (3 x corporate, 1 unspecified)
Australia: A watershed?
“No other country in the world has allowed
a single company to assume such a
commanding position in the market:
Australia has, in effect, embarked on a vast
national experiment” (Brennan, 2007, p. 226)
Pessimistic perspective
“What begins as the provision of a service to
fulfill collectively determined socio-political
purposes ends up as a drive to find mass-produced
goods that can be sold profitably. The collective
needs and values that the service was originally
created to serve are gradually marginalized and
finally abandoned”.
(Leys, 2001, p. 4)
Optimistic perspective
Stakeholder activism in the form of:
• demanding a social contract, and that the terms of
the contract be explicit and transparent
• demanding corporate social responsibility
reporting for for-profit human services provision
that is supported by taxpayer funding
• devising / having input into the development of
an audit tool that could be used for an externally
initiated audit to assist in circumventing ‘window
dressing’ reporting
Considerations for the UK|
• What, if any, social contract could be established with
childcare corporations?
• What safeguards are already in place and what might
need to be introduced?
• What requirements for transparency are in place / need
further development?
• What forms of checks and balances are appropriate
and feasible?
• How will empirical data be obtained? What data
would be most useful?
• What would an effective impact / cost-benefit analysis
ABC Learning Centres Pty Limited. (2007). ABC Notes Prospectus.
ABC. (2006). Financial Report: For the Financial Year Ended 30 June 2006 Retrieved 4 November,
2006, from
Ball, S. J. (2007). Education PLC: Understanding private sector participation in public sector education.
London and New York: Routledge.
Brennan, D. (2007). The ABC of child care politics. Australian Journal of Social Issues, 42(2), 213-226.
Cribb, A., & Ball, S. (2005). Towards An Ethical Audit of the Privatisation of Education. British Journal
of Educational Studies, 53(2), 115-128.
Davies, G. (2004). Economia: New economic systems to empower people and support the living world.
Sydney: ABC Books.
Harris, N. (2007, July). Women's Reflections on Choosing Quality Long Day Care in a Regional
Community. Paper presented at the Australian Social Policy Conference, Sydney.
Leys, C. (2001). Market-driven politics: Neoliberal democracy and the public interest. New York: Verso.
Purcal, C., & Fisher, K. (2004). Review of the early childhood teachers shortage interim policy for the
NSW Department of Community Services, Office of Childcare. Retrieved 12 December 2004. from
Rush, E. (2006). Child care quality in Australia (Discussion Paper Number 84). Canberra: The Australia
Rush, E., & Downie, C. (2006). ABC Learning Centres: A case study of Australia's largest child care
corporation (Discussion Paper Number 87). Canberra: The Australia Institute.
Stone, D. (2002). Policy paradox: The art of political decision making. London: W. W. Norton and
Company Ltd.
Sumsion, J. (2006). The corporatization of Australian childcare: Towards an ethical audit and research
agenda. Journal of Early Childhood Research 4(2), 99-120.